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Ernst & Young recently polled wealth managers and found that only 21% are still focused on building out their proprietary strategies.

The rest are unchaining their clients from in-house product and moving toward an open shelf, open architecture environment.

Open architecture is increasingly achieved via a unified managed account (UMA) structure -- like an SMA, only with multiple "sleeves" to accommodate as many asset classes as the client needs.

The money is allocated according to models constructed by third-party managers, but unlike an SMA, the assets never leave the sponsoring firm, so custody is not a concern.

Ernst & Young found that this kind of "overlay" system is becoming most popular among larger firms looking for ways to build truly unique portfolios for high-net-worth clients on a cost-effective basis.

At the moment, smaller firms tend to be forced into either cookie-cutter approaches or painstakingly handmade portfolios for every client -- generic in the one scenario and "proprietary" by default in the other.

And those firms with proprietary advice to sell are finding that their models can become a viable source of revenue. They no longer need to gather vast amounts of assets themselves.

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